The Commercial Tax Department, Government of Madhya Pradesh, has issued detailed instructions and a Standard Operating Procedure (SOP) dated April 24, 2026 for the screening and examination of taxpayers registered under the Composition Scheme of the GST Act, 2017. The initiative aims to ensure proper verification of eligibility conditions, detect discrepancies, and safeguard revenue interests.
The Composition Scheme allows small taxpayers to pay tax at a concessional rate subject to prescribed turnover limits and conditions. However, to ensure that only eligible taxpayers avail of the scheme, the department has initiated a focused drive for systematic screening of composition taxpayers based on risk parameters and data analytics.
As per the instructions, cases will be selected based on specific criteria, including taxpayers where Tax Deducted at Source (TDS) is reflected despite composition status, and those whose turnover falls within critical thresholds such as ₹35–50 lakh for services or ₹1.25–1.50 crore for goods during the financial year 2024–25. These cases will be prioritized for detailed examination.
The allocation of cases will be done through the departmental web portal, where officers will access the “Composition Taxpayer Screening – 2024-25” module. The module will provide taxpayer details such as GSTIN, jurisdiction, and relevant data points for analysis. Officers are required to verify discrepancies using multiple data sources, including GST returns, BO-Web, GST Prime, and E-Way Bill systems before recording findings.
A structured workflow has been prescribed wherein officers will evaluate each case against defined screening criteria and record their observations in the portal. Based on the analysis, each case will be categorized as:
- Selected for Audit
- Selected for Scrutiny
- No Discrepancy
Once submitted, no modifications will be permitted, ensuring accountability and accuracy in decision-making.
For cases selected for audit, proceedings will be initiated through issuance of FORM GST ADT-01 via the BO-Web portal, and further action will be taken in accordance with the GST Audit SOP issued in April 2026. For cases selected for scrutiny, FORM GST ASMT-10 will be issued, and subsequent proceedings will be carried out through the GST portal.
The SOP also outlines key areas of verification during examination, including eligibility under Section 10 and 10(2A), correctness of declared turnover, classification of goods and services, reconciliation with TDS and other data sources, verification through E-Way Bills, and correctness of tax payment under the composition scheme.
Officers have been directed to complete at least 10% of allocated cases every month, ensuring steady progress in screening and enforcement activities. Post examination, cases requiring further action such as cancellation of composition benefits or initiation of proceedings under Sections 73, 74, or 74A will be forwarded to the appropriate jurisdictional authority.
The department will undertake regular monitoring of progress at divisional and headquarters levels, with weekly reviews to ensure timely completion and effective implementation of the SOP.
The initiative is expected to enhance compliance among composition taxpayers, prevent misuse of the scheme, and strengthen the overall GST administration framework in the State.
All officers have been instructed to strictly adhere to the guidelines and carry out proceedings in accordance with applicable legal provisions. Any negligence or delay will entail personal accountability
The Complete SOP can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/04/Madhya-Pradesh-instructions-Standard-Operating-Procedure-SOP-April-24-2026.pdf
